WEBVTT - Government Shutdown Takes Effect, White House Pulls Antoni BLS Nomination

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Good morning.

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<v Speaker 3>I'm Nathan Hager and I'm Karen Moscow. Here are the

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<v Speaker 3>stories we're following today.

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<v Speaker 2>Karen, we begin with deadlock in DC. Congress has blown

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<v Speaker 2>past a midnight funding deadline to trigger the first government

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<v Speaker 2>shutdown in nearly seven years. Democrats and Republicans remain in

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<v Speaker 2>a spending standoff. The Democrats want to attach healthcare and

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<v Speaker 2>other policy changes to a stopgap spending bill. Senate Minority

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<v Speaker 2>Leader Chuck Schumer is blaming the majority party.

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<v Speaker 4>Republicans once again rejected democrats proposals to avoid a shutdown,

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<v Speaker 4>fixed healthcare premiums and spare Americans the calamity of skyrocketing

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<v Speaker 4>through the roof healthcare costs.

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<v Speaker 2>Senate Minority Leader Chuck Schumer says unless Congress act Obamacare,

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<v Speaker 2>tax credits will expire at the end of the year,

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<v Speaker 2>in premiums will spike. Majority Leader John Thune says Democrats

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<v Speaker 2>are to blame.

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<v Speaker 5>Democrats may have chosen to shut down the government tonight,

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<v Speaker 5>but we can reopen it tomorrow. All it takes is

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<v Speaker 5>a handful of Democrats to join Republicans to pass the clean,

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<v Speaker 5>non partisan funding bill that in front.

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<v Speaker 2>Of US Senate Majority Leader John Thune and his fellow

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<v Speaker 2>Republicans needed at least eight Democrats to support the funding bill.

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<v Speaker 2>Only three voted, with all but one Republican in favor

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<v Speaker 2>of it last night.

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<v Speaker 3>Nathan, the government shutdown means key services for Americans and

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<v Speaker 3>pay for federal workers are suspended. President Trump is tying

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<v Speaker 3>the healthcare funding stand off to immigration.

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<v Speaker 6>They wanted to be able to take care of people

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<v Speaker 6>that have come into our country illegally, and no system

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<v Speaker 6>can handle that. And so we're totally opposed on that.

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<v Speaker 6>But we can't take care.

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<v Speaker 7>We just can't do it.

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<v Speaker 6>I'd love to do everybody, I'd love to do.

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<v Speaker 8>The whole world, but.

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<v Speaker 6>Our country can't handle people that come into our country illegally.

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<v Speaker 3>President Trump spoke to reporters from the White House a lawn.

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<v Speaker 3>He's suggesting his administration will use this shutdown to conduct

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<v Speaker 3>mass lay offs of federal workers beyond temporary furloughs. The

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<v Speaker 3>Congressional Budget Office estimates about seven hundred and fifty thousand

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<v Speaker 3>federal employees will be sidelined each day the government is

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<v Speaker 3>shut down.

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<v Speaker 2>And Karen Bloomberg Economics estimates the shutdown could send the

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<v Speaker 2>unemployment rate from four point three to four point seven percent.

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<v Speaker 2>That's if it lasts for three weeks, and those furloughed

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<v Speaker 2>workers count as temporarily unemployed. Historically, much of the economic

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<v Speaker 2>impact from shutdowns has been recouped after it ends, but

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<v Speaker 2>during the last one, the Congressional Budget Office estimated the

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<v Speaker 2>US economy failed to recover three billion of the eleven

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<v Speaker 2>billion dollars at lost in overall output.

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<v Speaker 3>Well Nathan us Dock Index futures are slipping with the

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<v Speaker 3>start of the first government shutdown in nearly seven years.

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<v Speaker 3>We get more with Bloomberg's John Tucker John Good Morning, Hey.

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<v Speaker 9>Good morning, Karen.

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<v Speaker 10>Traders say if the shutdown stretches from days to weeks

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<v Speaker 10>and could intensify concern over an economic slowdown and drive

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<v Speaker 10>treasury yields and stocks lower. Well, the shutdown also means

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<v Speaker 10>that key economic reports they're on hold, that includes Friday's

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<v Speaker 10>critical jobs report, and traders fear that the loss of

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<v Speaker 10>visibilities is going to lead markets in the dark and

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<v Speaker 10>the outlook for monetary policy from the Fed. Daniel Polliot

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<v Speaker 10>oh Tree Capital Management sees it this way.

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<v Speaker 11>In the past, shutdowns have had a limited effect on

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<v Speaker 11>bonds and stocks, but with valuations so stretched in equities today,

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<v Speaker 11>this time potentially could be different.

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<v Speaker 10>Well, non essential fedal workers will be furlough. The Trump

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<v Speaker 10>administration has said they're looking to make some of those

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<v Speaker 10>cuts permanent, and that could create a shock, just as

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<v Speaker 10>FED policy makers are focusing on the labor market in

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<v Speaker 10>New York, John Tucker, Bloomberg.

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<v Speaker 2>Radio, Okay, John, thank you, speaking of the labor market.

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<v Speaker 2>The White House has withdrawn the nomination of EJ. And

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<v Speaker 2>Tony to lead the Bureau of Labor Statistics. His nomination

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<v Speaker 2>was seen as an attempt by the President to gain

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<v Speaker 2>control over the agency responsible for that key economic data,

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<v Speaker 2>including the monthly jobs report and the Consumer Price indexis

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<v Speaker 2>is used to measure inflation. Bloomberg's Miles Miller has more

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<v Speaker 2>on the surprise reversal.

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<v Speaker 5>E j.

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<v Speaker 12>Antonio was just to partisan from the Heritage Foundation, which

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<v Speaker 12>has a lot of connections to the current Trump White House,

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<v Speaker 12>and surely that he was just to partisan, and in

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<v Speaker 12>addition to that that they did not feel he would

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<v Speaker 12>have a smooth sailing on Capitol Hill.

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<v Speaker 2>Bloomberg's Miles Miller ads the Senate had not yet set

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<v Speaker 2>a date for a confirmation hearing.

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<v Speaker 3>Nathan as traders remain in the dark with economic data.

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<v Speaker 3>Should the shut down carry on, they may rely more

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<v Speaker 3>heavily on fed's speak. And we heard from Chicago Fed

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<v Speaker 3>President Austin Goulsby yesterday discussing the impact of tariffs on

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<v Speaker 3>interest rates.

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<v Speaker 13>I thought rates are going to come down in that environment,

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<v Speaker 13>and I was saying I thought they had a fair

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<v Speaker 13>bit of ways to go when they announced the tariffs

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<v Speaker 13>at those kind of rates, especially in manufacturing, also in agriculture.

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<v Speaker 13>It was the hair on fire kind of moment where

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<v Speaker 13>a lot of folks in the in various manufacturing industries

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<v Speaker 13>were saying, we can't if these are the rates, we're

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<v Speaker 13>not going to survive. We're going to see a real

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<v Speaker 13>closing out.

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<v Speaker 3>Austin Golesby spoke at an agricultural conference hosted by the

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<v Speaker 3>Chicago Fed. He also expressed concern about some government official

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<v Speaker 3>supporting the idea of giving the Trump administration the power

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<v Speaker 3>to influence interest rates.

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<v Speaker 2>While the standoff continues on Capitol Hill, Karen, President Trump

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<v Speaker 2>says his administration is close to ending a standoff with

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<v Speaker 2>Harvard and finalizing a five hundred million dollar deal. Speaking

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<v Speaker 2>in the Oval Office, alongside Education Secretary Linda McMahon. The

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<v Speaker 2>President explained what Harvard plans to do once that agreement

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<v Speaker 2>is reached.

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<v Speaker 6>Well in the process of getting very close, and Linda's

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<v Speaker 6>finishing up the final details, and they'd be paying about

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<v Speaker 6>five hundred million dollars and they'll be operating trade schools.

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<v Speaker 6>They're going to be teaching people how to do AI

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<v Speaker 6>and lots of other things.

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<v Speaker 2>President Trump's deal with Harvard would end one of his

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<v Speaker 2>highest profile class with American universities. It's not clear if

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<v Speaker 2>the settlement would include an independent monitor at something Columbia

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<v Speaker 2>University accepted in its own agreement.

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<v Speaker 3>And finally, Nathan and Company news Pfizer has agreed to

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<v Speaker 3>cut some prices by up to eighty five percent and

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<v Speaker 3>sell directly to the public in the US. The move

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<v Speaker 3>allows Pfizer to avoid tariffs on the pharmaceutical industry for

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<v Speaker 3>three years and addresses President Trump's argument that Americans are

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<v Speaker 3>paying more for medicines and remarks heard here on Bloomberg.

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<v Speaker 3>Swiser CEO Albert Borla talked about the deal at the

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<v Speaker 3>White House.

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<v Speaker 14>For years, other rich nations refused to pay the first

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<v Speaker 14>serve for the medical innovation, and as a result, Americans

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<v Speaker 14>had to assume this proportional cost on their soldiers. This

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<v Speaker 14>situation we all knew is not sustainable.

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<v Speaker 3>Heiser CEO Albert Borlow is speaking alongside President Trump. Other

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<v Speaker 3>major drug makers are expected to follow the move. Time

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<v Speaker 3>now for look at some of the other stories making

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<v Speaker 3>news in New York and around the world, and for

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<v Speaker 3>that we're joined by Bloomberg's Modica Rigs Monica, Good morning, Hey.

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<v Speaker 9>Good morning, Karen.

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<v Speaker 15>A federal judge says the Trump administration unconstitutionally targeted non

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<v Speaker 15>citizens for deportation over pro Palestinian protests. Bloomberg's Amy Morris

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<v Speaker 15>has that story from Washington.

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<v Speaker 16>A federal judge in Boston ruled a US policy that

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<v Speaker 16>targets international students for removal on idiological grounds is unconstitutional,

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<v Speaker 16>violating the First Amendment. The judge says the policy was

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<v Speaker 16>arbitrary and capricious, and accused Homeland Security Secretary Christy Nome

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<v Speaker 16>and Secretary of State Marco Rubio of misusing their powers.

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<v Speaker 16>US District Judge William Young also ruled the administration violated

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<v Speaker 16>the Administrative Procedure Act, so a hearing on that is

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<v Speaker 16>to be scheduled later in Washington. Amy Morris Bloomberg Radio.

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<v Speaker 15>President Trump says Hamas has a few days to accept

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<v Speaker 15>a peace proposal.

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<v Speaker 9>He says, Israel's already agreed to.

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<v Speaker 6>We're going to do about three or four days.

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<v Speaker 11>We'll see how it is.

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<v Speaker 6>All of the Arab country signed up, the Muslim country

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<v Speaker 6>is all signed up, zeels all signed up. We're just

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<v Speaker 6>waiting for Amas, and Amas is either going to be

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<v Speaker 6>doing it or not. And if it's not, it's going

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<v Speaker 6>to be a very set and.

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<v Speaker 15>He says the deal would include the release of Palestinian

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<v Speaker 15>prisoners in exchange for hostages. Rescuers are scrambling now to

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<v Speaker 15>find survivors after a powerful magnitude six point nine earthquake

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<v Speaker 15>at the Philippines last night.

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<v Speaker 9>At least sixty nine people have died.

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<v Speaker 15>Meantime, forecasters watching two big storms in the Atlantic. Here's

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<v Speaker 15>Bloomberg's meteorologist Craig Allen.

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<v Speaker 17>Hurricane Umberto is still in the Atlantic, a category one

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<v Speaker 17>with eighty mile per hour winds less than three hundred

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<v Speaker 17>miles away from Bermuda, but will ride up and over

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<v Speaker 17>Bermuda and stay away from the island except for the

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<v Speaker 17>rough surf and dangerous speech erosion and rip currents. Meanwhile,

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<v Speaker 17>Hurricane of Melda has become the more important storm with

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<v Speaker 17>eighty five mile per hour winds and is on a

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<v Speaker 17>track right now to directly hit the island of Bermuda

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<v Speaker 17>with winds that could exceed one hundred miles per hour.

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<v Speaker 17>May very well be a Category two.

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<v Speaker 15>Global news twenty four hours a day and whenever you

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<v Speaker 15>want it with Bloomberg News.

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<v Speaker 5>Now.

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<v Speaker 9>I'm Monica Rix, and this is Bloomberg Karen Nathan, Thanks Monica.

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<v Speaker 3>Time now for our Bloomberg Sports update, and for that

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<v Speaker 3>we bring in John stash Hour.

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<v Speaker 9>Thanks Karon.

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<v Speaker 8>The start of the baseball postseason three low scoring games,

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<v Speaker 8>and then the Dodgers beat the Reds ten to five

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<v Speaker 8>in LA. They hit five home runs, two by show

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<v Speaker 8>Heo Tony. The Red Sox beat the Yankees three to one.

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<v Speaker 8>Garrett Crochet at one point retired seventeen banners in a

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<v Speaker 8>row Detroit one two one in Cleveland, Derek scugelstruck at fourteen.

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<v Speaker 8>That comes with back to back home runs in the

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<v Speaker 8>fifth inning, beat San Diego three to one. The Angels,

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<v Speaker 8>another team that will need a new manager next season.

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<v Speaker 8>Ron Washington will not return. He didn't manage the second

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<v Speaker 8>half this past season after heart surgery. That's your Bloomberg

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<v Speaker 8>Sports update.

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<v Speaker 3>Stay with us more from Bloomberg day Break coming up

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<v Speaker 3>after this.

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<v Speaker 1>Coast to coast on Bloomberg Radio nationwide, on and around

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<v Speaker 1>the world on Bloomberg dot Com and the Bloomberg Business Appum.

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<v Speaker 9>This is Bloomberg Daybreak.

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<v Speaker 2>Good morning, I'm Nathan Hageren. For the first time in

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<v Speaker 2>nearly seven years, a government shutdown is underway in Washington.

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<v Speaker 2>But even before the funds lapsed just after midnight, the

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<v Speaker 2>finger pointing had been well underway in the Senate.

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<v Speaker 5>The Democrat caucus here in town in the Senate has

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<v Speaker 5>chosen to shut down the government over a clean, non

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<v Speaker 5>partisan funding bill.

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<v Speaker 4>Republicans are plunging America into a shutdown, rejecting by partisan talks,

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<v Speaker 4>pushing a partisan bill and risking America's healthcare.

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<v Speaker 2>And that was Senate Majority Leader John Thune and Minority

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<v Speaker 2>Leader Chuck Schumer hours before this latest shutdown took effect.

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<v Speaker 2>Joining us this morning, Terry Haynes, the founder of Pangaea Policy. Terry,

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<v Speaker 2>good morning. This is the first shutdown in nearly seven years,

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<v Speaker 2>but certainly not the first government shutdown ever. Will this

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<v Speaker 2>one be any different.

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<v Speaker 7>Good morning, Hi, Good morning, Nathan. I think it will

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<v Speaker 7>not be a lot different in the sense that it

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<v Speaker 7>won't be very long, and in two weeks everybody will

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<v Speaker 7>have forgotten what the fight was about, and there was

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<v Speaker 7>very unlikely to be much economic impact. One major bank

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<v Speaker 7>came out with a very good study that showed that

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<v Speaker 7>of the fourteen shutdowns that happened since Reagan became president

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<v Speaker 7>so forty five years ago, in ten of them, the

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<v Speaker 7>S and P was up from the time that the

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<v Speaker 7>shutdowns started to the time it ended. So I think

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<v Speaker 7>it's unlikely to have any lasting economic impact or markets impact,

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<v Speaker 7>that's for sure.

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<v Speaker 2>Well, how do you see this playing out, because in

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<v Speaker 2>the moments leading up to this, both sides seemed pretty

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<v Speaker 2>dug in, particularly the Democrats when it comes to their

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<v Speaker 2>demands for healthcare spending in a stopgap.

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<v Speaker 7>I think a couple of things. I think that firstly,

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<v Speaker 7>you know I've said to you before. I think both

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<v Speaker 7>alreadys want to shut down for political reasons and for

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<v Speaker 7>different political reasons. Democrats need to show some fight and

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<v Speaker 7>some resistance to the bad Orange Man, so they're doing that.

0:12:10.400 --> 0:12:12.000
<v Speaker 7>I also think it's not going to be a long

0:12:12.080 --> 0:12:15.720
<v Speaker 7>one for a couple of reasons. One is that, uh,

0:12:15.960 --> 0:12:18.440
<v Speaker 7>you know, all all Democrats need. Democrats are the ones

0:12:18.480 --> 0:12:21.840
<v Speaker 7>doing the asking, so I'm not being partisan here. They

0:12:21.920 --> 0:12:24.760
<v Speaker 7>have the more complicated position. Republicans just want to keep

0:12:24.800 --> 0:12:28.080
<v Speaker 7>things open. Democrats want stuff. They say they want the

0:12:28.080 --> 0:12:31.480
<v Speaker 7>healthcare stuff. All they need to do is to declare

0:12:31.559 --> 0:12:35.280
<v Speaker 7>victory is get negotiations with the Republicans. Republicans have already

0:12:35.280 --> 0:12:38.280
<v Speaker 7>indicated they're interested in doing that, just not on this bill.

0:12:38.400 --> 0:12:42.480
<v Speaker 7>So that's a fairly easy win. Beyond that, you know,

0:12:43.480 --> 0:12:48.360
<v Speaker 7>you can already see the cracks in Schumer's side. You

0:12:48.480 --> 0:12:53.400
<v Speaker 7>had three defections yesterday Fetterman, Cortes, Mastow, and King, who's

0:12:53.440 --> 0:12:58.120
<v Speaker 7>independent but caucuses with Democrats. And the longer this goes on,

0:12:58.200 --> 0:13:05.240
<v Speaker 7>the more pressure there will be from public employee unions,

0:13:05.679 --> 0:13:08.200
<v Speaker 7>who are big supporters of Democrats to want to bring

0:13:08.240 --> 0:13:10.559
<v Speaker 7>those folks back. So there's going to be a lot

0:13:10.559 --> 0:13:13.400
<v Speaker 7>of pressure on the Maryland and Virginia senators who represent

0:13:13.520 --> 0:13:17.400
<v Speaker 7>hundreds of thousands of those folks, and they'll be pushing

0:13:17.480 --> 0:13:20.240
<v Speaker 7>for some sort of resolution. After that, you only need

0:13:20.280 --> 0:13:22.319
<v Speaker 7>one more vote in order to keep the government open.

0:13:22.400 --> 0:13:24.600
<v Speaker 7>So you know, I think the tide goes out pretty

0:13:24.640 --> 0:13:28.360
<v Speaker 7>quickly on Senator shum Or, unless unless he tries to

0:13:28.360 --> 0:13:29.280
<v Speaker 7>declare victory here.

0:13:29.559 --> 0:13:34.199
<v Speaker 2>You mentioned the Maryland and Republican senators obviously constituents of

0:13:34.280 --> 0:13:37.560
<v Speaker 2>a large number of federal employees there. Do you think

0:13:37.679 --> 0:13:41.120
<v Speaker 2>this indication from President Trump that he could use this

0:13:41.240 --> 0:13:45.160
<v Speaker 2>shutdown to enact mass federal layoffs could lead to some

0:13:45.240 --> 0:13:46.920
<v Speaker 2>cracks here? Is that what you're getting at?

0:13:47.280 --> 0:13:47.439
<v Speaker 3>Oh?

0:13:47.559 --> 0:13:50.240
<v Speaker 7>Oh, exactly? So, yes, I mean there is a threat

0:13:50.280 --> 0:13:56.240
<v Speaker 7>to government employees, you know, employment status that hasn't existed before.

0:13:56.520 --> 0:14:01.280
<v Speaker 7>So far, the administration has not kind of pulled the

0:14:01.360 --> 0:14:05.600
<v Speaker 7>ultimate trigger on this, instead talking about furloughing people instead

0:14:05.640 --> 0:14:08.400
<v Speaker 7>of riffing or you know, completely getting rid of positions.

0:14:09.080 --> 0:14:12.320
<v Speaker 7>But you know, that's a distinction without much difference to

0:14:12.360 --> 0:14:15.680
<v Speaker 7>people who are very concerned about their jobs. You know,

0:14:15.720 --> 0:14:18.080
<v Speaker 7>I don't anticipate that there's you're going to have a

0:14:18.120 --> 0:14:22.000
<v Speaker 7>situation where the four Democratic senators from those two states

0:14:22.040 --> 0:14:25.600
<v Speaker 7>are going to you know, publicly break with Schumer or

0:14:25.640 --> 0:14:27.760
<v Speaker 7>anything like that. But there's going to be an awful

0:14:27.800 --> 0:14:31.560
<v Speaker 7>lot of pressure brought to bear to try to figure

0:14:31.600 --> 0:14:34.840
<v Speaker 7>out something that helps and improves the status of those

0:14:35.560 --> 0:14:36.560
<v Speaker 7>those public workers.

0:14:38.360 --> 0:14:41.800
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